The Debt Deal. Time To Do Your Own Tax?

Many people are confused about the recent debt deal and how it will affect them. The details of the deal raise a lot of questions and offer few answers. Federal spending will face huge cuts over the next 10 years and about one third of all cuts will come from defense and security.

One of the bills main feature is the establishment of a committee whose aim is to find a further $1.5 trillion in cuts. There are no guidelines as to where these funding cuts will be made and some commentators expect to see significant reductions in Social Security and increased taxation. However if this committee fails to come up with a comprehensive spending reduction plan then a series of automatic cuts will come into being. These cuts will hit Medicare, Medicaid, and military spending the heaviest.

There are a few things that savers and investors can do in order to protect themselves in these uncertain times. Investors should investigate how dependent the companies they hold shares in are on government contracts. These contracts will surely dry up in the coming years.

Anyone close to retirement should hold off on stopping work in order to defer their Social Security retirement plan. This will add 8% to your benefits, which is a lot more than you’ll get by putting that money in the bank.

If you are not already doing so you should do your own tax. You’ll save money by doing 2011 taxes yourself instead of hiring a professional. Once you have done your own tax for one year, you will be able to continue to make this saving for many years to come.

Top 5 Online Tax Scams

Yes, you don’t want to think of your taxes for 2011 until Tax Day comes along, but you should be wary.  Online scammers are planning already how to steal your identity and tax refund. The 2011 tax season’s scams include new tax credits going for donations to Japan for disaster relief, Websites that are search engine optimized and are filled with malware, dangerous e-mail, and Facebook “likejacking” techniques.

Around 19 million filed their taxes at their house for 2011 taxes.  This is a six percent increase from 2010, according to a report by the IRS.  During this time of year, tax-related online scams abound.  Tax scammers are aware that taxpayers are putting in their personal information online, as well as storing confidential financial documents on the hard drive of the computer.  They are also accessing sites to look for information on tax laws and deductions.

A representative for the security firm Sophos, Jennifer Torode, states that most people procrastinate and file their tax forms at the last minute.  Scammers take advantage of the frantic behavior of these latecomers, and lure their into their deceitful webs.

There are five top scams for this season-make sure to avoid them. First, the Japan Quake scam mimics an actual law from last year to set up a means for taxpayers to donate to the Haiti Fund. Gone Phishing (a bogus IRS website that looks as though it’s a tax preparation service, but is really meant to trick someone into downloading malware) is another one that trips people up. Black Hat SEO (Search Engine Optimization), is a way by which the criminal uses sites such as Google Trends to determine popular search keywords for people researching taxes, to optimize their chances of luring someone in. Likejacking on Facebook, or hiding a button over a like button directs to a link advertising a tax service, but it is actually a scam. Last, but not least, phony e-mail is used in the form of a fake message from the IRS to download a form and then give your social security number.

All of these scams have been successful on occasion, but as long as the public is made aware of them, there is less likely to be a chance that as many people will be tricked into giving personal information or allowing someone to get their documents from their hard drive.

Taxes: How To Obtain Information You May Need

When filing their 2011 taxes a taxpayer may need to look at their past tax return for a vital piece of information.   This information is available from the Internal Revenue Service.   When attempting to obtain this information there are certain criteria you must know.

  1. The IRS offers three ways to obtain this information.   You may ask for it in a written letter, search for it online or you may call them by phone.  You can also obtain forms to file your 2011 taxes through these options.
  2. This is a free service for a transcript and records are available from the IRS from as far back as the last three previous years.
  3. This transcript will only be for the original tax form filed with any attachments that were included.  If you filed a corrected return this will not show on the transcript.
  4. You can request a tax account transcript that will reflect any changes made after the initial filing.  These transcripts will reflect personal information, schedule of tax return and your adjusted gross income.
  5. This information can be obtained by logging on to www.IRS.gov.  On the left side of the webpage under online services you will find a tool  a link called Order Tax Return or Account Transcript or if you prefer to call the toll free number is 800-908-9946.  You will receive a voice prompt that will guide you to what you need.   These options take about 5-10 business days to receive your transcripts.
  6. If you like doing everything in writing and have time to wait 30 days for this transcript you can request the forms by mail.  You will need to use Forms 4506T or 4506T-EZ to order by mail.
  7. To receive copies of returns older than 3 years old, you will need to complete the Form 4506 and mail it with $57 to the Internal Revenue Service listed or your area.  It is recommended that you allow 60 days to receive these returns.
  8. You can obtain the printable forms you need to request a transcript at the IRS’ website or call and request them from 800-TAX-FORM.

The Internal Revenue Service has made obtaining copies of your tax returns easy by following these suggestions.   If you need a past tax return for information requested on your 2011 taxes, everything you need is available and easily obtainable through three simple options.